State v. Reynolds
| Decision Date | 25 June 1919 |
| Docket Number | No. 20731.,20731. |
| Citation | 213 S.W. 804,278 Mo. 695 |
| Parties | STATE ex rel. COMMONWEALTH TRUST CO. v. REYNOLDS et al., Judges. |
| Court | Missouri Supreme Court |
Jeffries & Comm, Moses N. Sale, and David Goldsmith, all of St. Louis, for petitioner Commonwealth Trust Co.
Dawson & Garvin, of St. Louis, for respondents.
Certiorari to the St. Louis Court of Appeals, directing it to send up for review the record in the case of Henry R. Strong v. Commonwealth Trust Company. In that case the plaintiff, Strong, had obtained a judgment in the circuit court of the city of St. Louis against the Commonwealth Trust Company. There were cross-appeals, and the St. Louis Court of Appeals reversed and remanded the case with directions. It is contended by the relator here that the opinion thus rendered contravenes certain rulings of this court.
The facts, as disclosed by the opinion, are that Strong, the plaintiff in the original suit, was the editor, publisher, and owner of a trade journal in the city of St. Louis entitled the National Druggist. William S. Ferguson was an employé of Strong's. Ferguson's duties were those of a stenograpner and bookkeeper; in addition, he did general clerical work, opened the mail, receipted for cash, checks, drafts, subscriptions, and payments for advertising. From day to day he deposited the checks and drafts payable to Strong or the National Druggist. Checks and drafts received by Ferguson were required to be deposited in the Mechanics-American National Bank, with which alone Strong did his banking business. Strong's account in that bank was kept during the period covered by this suit in the name of the National Druggist. To enable Ferguson to make the deposits of the checks and drafts with the bank, Strong provided a rubber stamp which, up to and including 1908, read: "Pay to the Mechanics-American National Bank for credit of National Druggist," and subsequent to that date: "Pay to the Mechanics-American National Bank for the credit of Henry R. Strong." It was Ferguson's duty to deposit checks and drafts received in the course of the business during the time stated, as indicated by these stamps. He was never authorized to draw or sign checks, and he did not, as to the funds in the Mechanics-American National Bank. When he received remittances he receipted for them either in the name of the National Druggist or that of Henry R. Strong, following either with his initials, "W. S. F."; never with his full name, or with the designation of treasurer or otherwise. Strong never indicated the authoritative connection of any one with his business other than himself.
During the time of Ferguson's employment, he was, at his own instance, listed in the St. Louis city directory, after his name, as "Clerk National Druggist; residence, 3527 Henrietta street." Neither upon the letterheads, papers, or documents of the National Druggist did he appear as an officer or otherwise. He kept in the discharge of his duties while employed by Strong three books, a journal, ledger, and cashbook. In the journal and ledger he entered the cash, checks, and drafts received, and like entries were supposedly, or should have been, entered in the cashbook. About April 30, 1913, he did not appear at the office, as theretofore had been his custom, and investigation disclosed that he had absconded and was short' on his accounts. It was discovered upon an examination of the books that in many instances the receipt of checks and drafts from patrons of the Druggist had been noted on the ledger, but that no corresponding entries had been made on the cashbook. Further investigation disclosed that these checks and drafts had been cashed by Ferguson, as evidenced by the canceled checks sent by the various makers to Strong during the course of the inquiry. It was developed that during the period of Ferguson's employment he was indebted to the account of the National Druggist by reason of such peculations in a sum of about $32,198. In the perpretation of these fraudulent conversions he had opened up accounts with three banking institutions, among others, the Commonwealth Trust Company, the relator here. The account opened by him with the trust company was an the name of the National Druggist. These deposits with the trust company commenced on October 17, 1907, and continued from time to time until October 29, 1908, and aggregated $6,470.76. They were all made payable to the order of the National Druggist. In furtherance of these frauds, Ferguson had procured a rubber stamp with which the checks and drafts were indorsed when deposited by him with the trust company. It read: Ferguson was never treasurer of either the National Druggist or Strong, and was never held out to be by the latter, who had no knowledge until after Ferguson's disappearance of these transactions, and had conferred no power, general or special, on him which would have given colorable authority to his acts in this behalf.
The trust company made no inquiry as to Ferguson's right to open the account with it, or to sign or indorse checks in the manner stated. During all of this time the office or place of business of the National Druggist was in the Century building, a few blocks distant from the trust company, a fact that could have been ascertained from various public sources. Although the place of business of the National Druggist, as given by Ferguson on the deposit slips drawn by him was that of his private residence, 3527 Henrietta street, and was never the address of the National Druggist, or of Strong, as the most cursory examination would have disclosed, the trust company made no effort to ascertain the true facts. It simply, without any inquiry, accepted the deposits made to the National Druggist, and paid them out on checks signed by "W. S. Ferguson, Treasurer."
The examination, as stated, disclosed that Ferguson had deposited in the trust company funds belonging to the National Druggist, aggregating $6,470.76, and had subsequently drawn it all out as treasurer and had deposited it in his own name. Armed with these facts, Strong made demands in May and August, 1913, of the trust company for the payment to him of the amount stated. The latter refused payment. Whereupon this suit was brought.
The petition is for money had and received; the amount claimed being $6,470.76. The answer admits all of the formal facts heretofore stated in regard to the opening of the account with it by Ferguson in the name of the National Druggist, the aggregate amount of same, and that it was drawn out by him as treasurer. All other facts are, denied.
The trust company pleaded further, in defense, that the relation of Ferguson to the National Druggist and to Strong as business associate, cashier, bookkeeper, treasurer, and general agent was such as to authorize him to make the deposits and draw them out as disclosed by the facts; that if any loss was occasioned it was due to the carelessness and negligence of Strong in his grant of unlimited authority to Ferguson and his neglect to examine the condition of the latter's accounts; that Strong was barred by the five-year statute of limitations; and that he was further estopped by lapse of time and laches in asserting his claim against the trust company. It was further alleged that Strong had received from Ferguson a portion of the money on deposit with the trust company, and that having obtained and used the money, and failing to offer it to the trust company, Strong, by bringing this action; had ratified the act of Ferguson in indorsing the checks. There was no evidence in support of this last averment.
A specific reply in denial was interposed to all of the defensive matters pleaded in the answer.
The trial court instructed the jury, which so found, that all items proved by Strong to have been received by the trust company and drawn out by Ferguson prior to August 27, 1908, were barred by the statute of limitations at the time of the institution of the action, and that the verdict should not be for more than $917.40. The Court of Appeals, in reversing this judgment, held that the trust company had received the money, credits, and effects belonging to the National Druggist for Strong, without his authority, and that they had been withdrawn by an unauthorized party, rendering the trust company liable for the amount so unlawfully deposited and withdrawn; that the trial court erred in giving the instruction to the effect that all items of the account were barred under the five-year statute of limitations (section 1889, R. S. 1909), prior to August 27, 1908; that Strong was entitled to recover on the whole account under the evidence, with 6 per cent. per annum from the date of demand, if the jury found there was a demand; if not, then from the commencement of this action, if made or brought within five years from the last item of the account, viz. October 29, 1908; that the action was commenced on September 20, 1913; and that the five-year statute of limitations did not commence to run until the date of the last entry in the account.
The judgment of the circuit court was therefore reversed by the Court of Appeals and the cause remanded, with directions to the trial court to ascertain upon a retrial of that issue alone the full amount which may have been deposited in the name of the National...
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